A Manager Chooses to Ignore a Rigorous Decision-Making Process and Selects

question 36

Multiple Choice

A manager chooses to ignore a rigorous decision-making process and selects TV monitor A over monitor B because he "trusts" company A more than company B.If the decision he made was rational, which of the following is true?

• A)Monitor A is really the better choice.
• B)The manager should have included "trust" as a criterion.
• C)Monitor B is really the better choice.
• D)The manager must have made a mistake in calculating his weighted criteria.

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Definitions:

Foreign Exchange

The exchange or swapping of one type of currency for another.

Absolute Purchasing Power Parity

A theory suggesting that the exchange rate between two currencies should equal the ratio of the countries' price levels for a fixed basket of goods and services.

New York Stock Exchange

One of the largest stock exchanges in the world, located in New York City, where stocks are bought and sold.

Relative Purchasing Power Parity

An economic theory that states the rate of exchange between two currencies will adjust to reflect changes in the price levels of the two countries.